Monday, 7 February 2011

Innovation is a Political Act - Discuss

Innovation is about doing new things and learning to do old things in new ways to create new value. We need to understand why organisations become “sticky” under innovation pressure and the forms that this “stickiness” takes when innovators are trying to introduce new approaches to create new value through organisations.

• A culture is a by-product of a technology stabilization process, it is composed of the problem-solving experiences and processes involved in turning an invention into an innovation. All cultures are relatively “sticky” in the sense that they resist pressures to change.

• Strong cultures continually evolve new behaviours to block change, to maintain social stability and power structures based upon existing patterns and accumulated reserves of mutual Relational Capital.

• The greater the mutual Relational Capital in the network, the “stickier” the organisation. The stickier an organisation, the more pronounced its tendency to focus on the problems it can solve, rather than the problem it needs to solve (as a means of avoiding renegotiating existing stocks of Relational Capital).

Relational Capital is the social “capital” you build through establishing positive impressions and trusting relationships with key colleagues, stakeholders and potential internal customers, through trading and being able to bank favours at crucial times in the lifecycle of the business and personal careers. It explains the tendency within major corporations and political parties to appoint that “safe pair of hands” who turns out to be a dangerous idiot (unable to recognise that the context has changed, old customers want new things and new customers have emerged) instead of appointing the innovator who wants to move the strategy in a new direction, to change the rules and create new value. That “safe pair of hands” is usually the manager who is owed the most in Relation Capital transactions, the value of which would disappear if the technology and direction of the business changed and made the existing transactions void.

This explains the tendency to optimise existing products, services and business models instead of moving into the territory of creating genuinely new value by focusing on becoming effective. If you hold a big account of Relational Capital, would you want to give it up? This also explains the 60-70% failure rate of systemic change programmes. When you change organisations, you make all current existing Relational Capital void.

We need to unpack the nature of this Relational Capital, explore and understand the forms it takes, and the conditions under which it be both open and closed, positive and negative. In other words: whether it can be positive and open (when you have an “open” approach to constructing Relational Capital that is inclusive) and whether a closed approach is always negative and defensive, a conscious option or merely a social reflex that we can influence by working with leaders and persuading them of the benefits of consciously managing their approach to Relational Capital.

I will develop these ideas and this topic at Henley KM Forum Conference on 17th February 2011 (1345-1515 in the TK Conference Room).

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About Me

Chief Innovation Officer: Institute for the Study of Zombie Organizations, CIO Milamber Consulting, Mentor to Social Innovation Lab Kent (SILK), Author, featured in the WSJ, contributed to HBR, and is on several Advisory Boards. His “Knowledge Activist’s Handbook” has been cited as the “best management book within the last ten years”.
Head of Innovation Strategy, Technology Strategy Board (2008/9); As Pfizer’s Chief Learning Officer (2000-2005), influenced the Innovation Surge within Global R&D.
His recent innovation consulting includes financial services, regulatory organizations, manufacturing, biopharmaceuticals, foreign government national innovation development strategies, manufacturing and telecoms. He is the inventor of several fast innovation techniques, has recently been applying his Innovation Leadership Model with CEO mentoring groups and prototyping Open Innovation strategies based on collaborative alliances with the University of Greenwich Business School.
Victor is a Visiting Professor in Knowledge and Innovation Management to both Greenwich and OU Business Schools, and has served as a special forces reservist.